6. Understanding the NPV profile If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV) and internal rate of return (IRR) methods agree Projects W and X are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows. NPV (Dollars) Year Project W Project X 800 $1,000 $1,500 $350 $500 $600 $750 $200 $350 $400 $600 600 Project X 400 4 Project W 200 If the weighted average cost of capital (WACC) for each project is 18%, do the NPV and IRR methods agree or conflict? 200 0 2 4 6 8 10 12 14 16 18 20 The methods conflict. O The methods agree COST OF CAPITAL (Percent